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Judgment Summary — P.C. Pandit, J. (Civil Revision Nos. 591-A & 592-A of 1965)

Factual and Procedural Background

Two adjacent shops in Amritsar were let by separate rent deeds to Mela Singh, the predecessor-in-interest of the present petitioner and respondents Nos. 2–6. After Mela Singh's death, the landlord filed two ejectment applications against his heirs and legal representatives under section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949, claiming that the tenant had committed acts likely to impair materially the value or utility of the shops.

The uncontested factual findings were that the tenant had made an opening measuring 6' × 2' in the wall separating the two shops; there was no other damage; and that the opening could be closed at a cost of about Rs. 15 or Rs. 20.

Procedural history: The Rent Controller concluded that, although the opening reduced value marginally (about Rs. 20) and, considered individually, affected utility, the impairment was not material because the opening could be closed at nominal cost; he therefore rejected ejectment. The appellate authority reversed, holding that the existence of the opening materially impaired the utility of the shops (because they could not be used conveniently as two separate units), and allowed the landlord's claim. The present Civil Revision petitions were filed by the tenant against the appellate authority's order.

The operative statutory text relied on in the proceedings (quoted in the opinion) is section 13(2)(iii) of the Act, which permits eviction if the tenant "has committed such acts as are likely to impair materially the value or utility of the building or rented land."

Legal Issues Presented

  1. Whether the making of a 6' × 2' opening in the intervening wall of two adjacent shops — an alteration that could be closed at a nominal cost of Rs. 15/20 and caused no other damage — constituted an act "likely to impair materially the value or utility" of the shops within the meaning of section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Nand Lal v. Dr. Gurbaksh Rai Minor defects (e.g., smoke marks) that can be remedied easily (with cleaning and whitewash) do not materially impair the value or utility of premises. The court cited this decision to support the proposition that trivial and easily repairable alterations or blemishes cannot be treated as materially impairing value or utility; applied to the present case, the small, repairable opening could not be regarded as a material impairment.
Sm. Savitri Devi v. U.S. Bajpai, A.I.R. 1965 Nag 60 The landlord must prove not only an act of waste but also that the act is likely to materially impair value or utility; temporary/repairable alterations or minor demolition which are not significant and can be easily repaired do not justify termination. The court relied on this decision to reinforce that pulling down or altering a portion of a building will not amount to a ground for eviction under the Rent Control regime unless the damage is significant and not easily reparable; thus the nominal-cost repairable opening did not warrant eviction.

Court's Reasoning and Analysis

The court proceeded by construing section 13(2)(iii). It emphasized that eviction under that clause requires satisfaction that the tenant has committed acts likely to impair materially either the value of the rented building or its utility.

Step 1 — Value: The court observed it was undisputed that the opening did not materially impair value because the defect could be corrected by spending only about Rs. 15–20. Hence the value ground failed.

Step 2 — Utility: The narrower issue was whether the opening materially impaired the shops' utility — i.e., whether their usefulness had been substantially diminished such that they could not be let independently as they originally were. The court accepted that the shops had been originally let as two independent units and asked whether the opening would prevent their independent use after vacation.

The court rejected the appellate authority's approach that the inquiry must be conducted "abstractly" without regard to reparability and that any alteration preventing convenient use by separate tenants was, by itself, material. The court reasoned that such a view would unjustifiably bar tenants from making even minor alterations necessary for proper enjoyment of the premises.

The court drew a distinction between:

  • Material changes or alterations that alter the nature of the accommodation or cause significant damage; and
  • Small, necessary alterations which can be removed or remedied by a tenant at small expense without causing lasting damage.
Only the former would ordinarily qualify as acts "likely to impair materially" value or utility.

The court emphasized the import of the words "impair materially": since the opening could be closed for a nominal amount and the premises restored to their original condition, the court concluded that the utility of the shops was not materially diminished. The court supported this conclusion by citing Nand Lal and Savitri Devi, which held that minor, easily reparable defects do not amount to material impairment justifying eviction.

On the basis of that reasoning, the court found the appellate authority had erred in ignoring reparability and the statutory qualifier "materially".

Holding and Implications

Holding: The Civil Revision petitions were allowed. The court set aside the appellate authority's order and restored the Rent Controller's orders rejecting the landlord's ejectment applications. The parties were directed to bear their own costs. The opinion concludes with: Petition allowed.

Implications: The direct effect is that the tenant's challenge succeeds and there is no eviction order on the basis of the small, repairable opening. The court's reasoning underscores that under section 13(2)(iii) trivial or easily reparable alterations that do not substantially diminish the usefulness or value of rented premises do not justify eviction. The opinion does not purport to lay down any broader, novel doctrine beyond applying the statutory test and existing precedents to the facts of this case.

Disposition: Orders of the appellate authority set aside; Rent Controller's orders restored; parties to bear their own costs.

    Charan Singh v. Shrimati Ananti And Others

    P.C Pandit, J.:— This order will dispose of two connected Civil Revision Nos. 591-A and 592-A of 1965 filed by the tenant against the order of his ejectment from the shops in dispute passed by the appellate authority reversing the decision of the Rent Controller. Two adjacent shops in the city of Amritsar were taken on rent by one Mela Singh, predecessor in interest of the present petitioner and respondents Nos. 2 to 6 by means of two separate rent deeds. Mela Singh, the original tenant having died, two applications for ejectment were filed by the landlord against his heirs and legal representatives. The ejectment was claimed on the ground that the tenant had committed such acts as were likely to impair materially the value or utility of the shops in dispute, which was covered by section 13(2)(iii) of the East Punjab Urban Rent Restriction Act, 1949 (hereinafter referred to as ‘the Act’). The facts found in this case about which there is no dispute, now are that the tenant during the continuance of his tenancy had made an opening 6′ × 2′ in the wall separating the two shops for his own convenience. It is further found that this opening could be closed at a cost of Rs. 15/- or Rs. 20/-. There was no other damage caused to the premises. The question for determination, therefore, is whether on these facts it could be held that the tenant had committed such acts as were likely to impair materially the value or utility of the shops. The Rent Controller took the view that the said opening did have the effect of reducing the value of the shops, but only to the extent of about Rs. 20/- and that could not be treated as material within the meaning of section 13(2)(iii) of the Act. As regards materially impairing the utility of the shops, he was of the opinion that this opening must have increased the utility of the shops so far as the tenant was concerned, because otherwise there was no reason why he should have made this opening He, however held, taking the shoo individually, the opening must be taken to have affected their utility adversely, ‘but since the opening could be closed at a nominal cost of Rs. 15/- or Rs. 20/-, it had to be ignored’. He further held that by closing the opening, the shops could be brought back to their original position without affecting the utility. Finally, he concluded that the opening had neither materially impaired the value nor materially impaired the utility of the shops in dispute.

    2. The appellate authority, on the other hand, observed that in order to show that the utility of a rented building had been materially impaired it was not necessary to prove that its value had also materially diminished. The circumstances that the opening could be remedied at an expense of about Rs. 15/- or Rs. 20/- was, according to him, therefore, wholly immaterial for the purpose of deciding as to whether the utility of the shops had been materially impaired or not. He further said that there was nothing in section 13(2)(iii) which would indicate that the impairment of the utility of the shops in dispute had to be considered with reference to the use to which they were being put by the tenant or with reference to his convenience.

    3. The question had to be considered ‘abstractly’ so that what was to be seen was whether the shops could be utilised in the same manner and to the same extent as when they had just been let out to the tenant. The existence of the opening, according to him, ruled out the possibility of their being used conveniently as two separate units by two different tenants. This actor, in his opinion, clinched the matter in favour of the landlord and he, consequently, held that the utility of the two shops had been materially impaired on account of this opening having been made by the tenant.

    4. The only point for decision in this case is whether the opening ??? in the intervening wall of the two adjacent ??? on rent was likely to impair materially the value or utility of the said shops when it was found that the closing of this opening would cost only about Rs. 5/- or Rs. 20/-.

    section 13(2)(iii) of the Act reads thus:

    “13. ****

    (2) A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the applicant, is satisfied—

    (i) ***

    (ii) ***

    (iii) that the tenant has committed such acts as are likely to impair materially the value or utility of the building or rented land, or

    the Controller may make an or der directing the tenant to put the landlord in possession of the building or reeled land and if the Controller is not so satisfied he shall make an order rejecting the application;

    *****”

    5. A reading of this clause would show that before the Controller makes an order for the ejectment of the ten int he has to be satisfied that the tenant has committed such acts as are likely to impair materially either the value of the rented building or the utility of the said building. If the landlord is able to establish any of these two grounds, he can get an order of eviction from the Rent Controller in his favour.

    6. It is not disputed that the said opening is not likely to impair materially the value of the two shops, because the same can be closed at a cost of only Rs. 15/- or Rs. 20/-. Now the question is whether this opening is likely to impair materially the utility of the said shops. In other words, has the usefulness of the said shops been substantially diminished by this opening? Admittedly these, shops were let out to the tenant as two independent units by two separate rent deeds. Has the tenant, during the course of his tenancy, done something to the premises which was likely to impair materially their utility, so that they would not be in a position to be let out independently as separate units after he vacates them? It is undisputed that by spending only Rs. 15/- or Rs. 20/- the premises could be put back exactly in the same position in which they were rented out. That means that the profitableness of the shops would not be diminished essentially in an important, degree by this opening. It is true, as remarked by the appellate authority, that the utility of the shops had not to be considered from the point of view of the convenience of the tenants and the use to which they were being put by them Under this clause, it is the Rent Controller who has to be satisfied if the tenant has committed such an act which is likely to impair materially the utility of the said shops. It is also true, as observed by him, that what was to be seen was whether the shops could be utilised the same manner and to the same extent as when they had been let out to the tenant. But in my opinion, the learned appellate authority has gone wrong when he says that the existence of the opening rules out the possibility of these shops being used conveniently as two separate units by two different tenants. His view seems to be that under this clause, the tenant is not authorised to make even the slightest possible change in the rented premises for their proper enjoyment and the moment he does that he is a liable to eviction irrespective of the fact whether the rented building could be brought ??? by incurring a little expense. In my ??? that the tenant cannot make even a small alteration, which is necessary for the proper enjoyment of the tenant premises. It is of course understood that he cannot make material changes in the building or alter the nature of the accommodation. The small alterations that he makes for the proper enjoyment of the premises should be such as the tenant may be able to remove by incurring a small expenditure and without in any way causing damage to the rented building. If the alteration made by the tenant in the building is not significant and can be easily repaired, the landlord cannot ask for his eviction on that ground. Further, the appellate authority has ignored the words ‘impair materially’ occurring in this clause. If the opening made by the tenant could be closed by spending a nominal amount of Rs. 15/- or Rs. 20/-, it could not be said that he had done such an act which was likely to impair materially the utility of the building.

    7. The view that I have taken above finds support in the decision of Falshaw, C.J in Nand Lal v. Dr. Gurbaksh Rai,1 where it was observed—

    “The finding regarding impairing materially the value or utility of the building is based simply on the fact that in the portion of the shop used as a kitchen there are some marks of smoke on the walls, and since this can easily be put right with a little cleaning and a coat of white wash it is quite impossible to say, that the value or the utility of the building has been materially impaired”.

    8. Similarly in Sm. Savitri Devi v. U.S Bajpai . A.I.R 1965 Nag 60. a Division Bench of the Nagpur High Court held thus—

    “The landlord, in order to be entitled to the grant of permission to terminate the tenancy is required not only to prove an act of waste on the part of the tenant but also to prove that the said act is likely to impair materially the value or utility of the house. Where the tenant has raised temporary shed which did not alter or demolish any part of the house except a portion of the front compound wall, so far as the erection of the temporary shed is concerned, it cannot be said to be an act of waste in the sense in which it is understood in law.

    As regards the pulling down of the portion of compound wall, while pulling down a part of the building is prohibited under the general law, it will not amount to an act that can be impeached under the Rent Control Order if the damage done is not significant and can be easily repaired. Such an act will not entitle the landlord to the grant of permission to terminate the tenancy unless it is likely to impair materially the value or utility of the house itself”.

    9. In view of what I have said above, these petitions succeed with the result that the orders of the appellate authority are set aside and those of the Bent Controller restored. The parties are, however, directed to bear their own costs throughout.

    10. Petition allowed.

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    Charan Singh v. Shrimati Ananti And Others
    (Jul 29, 1966)